Articles

by Jean-Marc Therrien, Director of Expertise at Progima

these times, as labour shortages put enormous pressure on manufacturers, they don’t always have the means and expertise to make up for a lack of employees. Quite often, it’s possible to optimize production with the people and equipment in place before resorting to large investments or sacrificing growth.

The Progima team proposes three key steps to optimize current resources and maximize production.

1. Increase your staff occupancy rate

Can your employees work non-stop, independently and at a normal pace? If the answer is no, you probably have an opportunity to improve your workforce occupancy rate. This indicator measures the relationship between the time employees are at work and the time they spend adding value to your production.

The main causes of low labour occupancy are:

• The lack of raw materials
• The use of erroneous, incomplete or inaccurate information in production
• or defective equipment/tools
• The absence of clear instructions for the tasks to be performed
• The inability of an employee to work independently due to a lack of training

Here are some potential solutions to increase your occupancy rate:

• Review your production and material planning processes
• Assess your release process
• Optimize your business processes
• Implement a preventive maintenance program
• Document your working methods
• Set up a training and versatility development program for all your employees

2. Increase your added-value rate

Do your employees work continuously and independently? Have you ensured that the time worked generates value? At this stage, the objective is to eliminate and reduce production waste to significantly increase your added-value rate. Waste in the factory is grouped into 8 categories:

• Overproduction
• Non-quality
• Inventory
• Waiting
• Displacements
• Movements
• Unnecessary operations
• Lost creativity

Generally, manufacturers’ added-value rate is frequently below 40%, while the optimal rate should be between 60% and 70%. Thus, the first step would be to identify the most frequent wastes in your company and to estimate your added-value rate.

Here are some possible solutions to increase your added-value rate:

• Eliminate reworking and backtracking in your processes
• Remove steps that add no value
• Reduce inventory (WIP) between items and reconcile them
• Linearize factory production flows
• Reduce your start-up times (SMED)
• Review workstation organization (5S)
• Implement a visual environment that allows you to quickly find anything (5S)

3. Increase your factory's rate of return

Although your employees can work non-stop and independently with a high added value rate, why is your factory unable to produce what is expected every day? In this situation, it’s very often an insufficient rate of return. Note that custom manufacturing doesn’t justify production not delivering what’s expected every day.

The rate of return is the measure that compares the actual time to complete a task to the time normally required as established by the company. This reference time, often called standard time, corresponds to the time required by a normal (and trained) operator to carry out a task according to a standard method where waste has already been eliminated.

A majority of manufacturers have a rate of return of less than 30% to 40%, and the best companies have a rate of return of at least 85%.

Here are some important steps to achieve in order to measure and increase your rate of return:

• Optimize and standardize your working methods
• Establish standard times for these methods
• Implement data collection systems
• Set up indicators to calculate and communicate current rates (performance)
• Initiate a simple management structure to track and identify actions or projects aimed at improving your rate of return

In conclusion, while hiring new staff and investing in automation are necessary to ensure your business growth, ensure that you have maximized all potential capacity gains from improvement projects. It’s often much simpler and less costly to improve, especially if you do it in a structured way and if you know where your company stands in terms of industrial maturity. It will also be much easier to justify investment projects and the hiring of additional staff.

And remember, as the famous management consultant Peter Drucker said, "You can't improve what you can't measure."

To learn more, contact Progima's operational performance experts:

Toronto (905) 474-2577
Montreal (514) 337-6662
[email protected]

OPTIMIZATION OF BUSINESS PROCESSES | OPTIMIZATION OF WORK ORGANIZATION | OPERATIONAL DIAGNOSTICS | LEAN MANUFACTURING | LEAN MANAGEMENT